Employment was virtually unchanged (+0.0%) in December, and the unemployment rate held steady at 5.8%, according to a report released Friday by Statistics Canada.

Andrea Piacquadio

The employment rate fell 0.2 percentage points to 61.6%, as the population aged 15 and older grew by 74,000 (+0.2%), said the federal agency.

“Among core-aged men (aged 25 to 54), employment rose by 25,000 (+0.4%). Employment also rose among young women aged 15 to 24 (+13,000; +1.0%) but declined among men aged 55 and older (-27,000; -1.1%),” it said.

“There were more people employed in professional, scientific and technical services (+46,000; +2.4%), health care and social assistance (+16,000; +0.6%) and “other services” (which includes personal and repair services) (+12,000; +1.5%) in December. There were declines in five industries, led by wholesale and retail trade (-21,000; -0.7%) and manufacturing (-18,000; -1.0%).

“Employment increased in four provinces in December, led by British Columbia (+18,000; +0.6%), while it declined in Ontario (-48,000; -0.6%). Total hours worked rose 0.4% in December and were up 1.7% on a year-over-year basis. On a year-over-year basis, average hourly wages rose 5.4% (+$1.78 to $34.45) in December, following an increase of 4.8% in November (not seasonally adjusted).”

Statistics Canada said employment held steady in December (+0.0%), following little change in November (+25,000; +0.1%) and October (+18,000; +0.1%). Employment growth slowed in the second half of 2023, averaging 23,000 per month, compared with the first six months of 2023, when it averaged 48,000 per month.

“The population aged 15 and older in the Labour Force Survey (LFS) grew by 74,000 (+0.2%) in December, on par with the average monthly population growth in 2023 (+79,000 per month). The employment rate—the proportion of the population aged 15 and older who are employed—fell 0.2 percentage points to 61.6% in December, the fifth decline in the past six months,” it said.

“The employment rate has trended down in 2023, as population growth generally outpaced employment gains. In December, the employment rate (61.6%) was down 0.9 percentage points from its recent high of 62.5% recorded in January 2023.”

Unemployment rate by province and territory, December 2023

Andrew Grantham, Senior Economist, CIBC Capital Markets, said Canadian employment stagnated to end 2023, against expectations for a further modest increase (consensus +15K). However, while the population continued to grow quickly, a two-tick decline in the participation rate meant that the jobless rate held steady at 5.8% (consensus 5.9%).
“The sector breakdown of employment pointed to a strong gain in professional & scientific services, which was counteracted by declines in other areas such as wholesale & retail and manufacturing. The jobs created during the month were part time (+24K), with a decline in full time positions counteracting this increase. However, despite this tilting of employment and despite a negative impact from public sector strike action in Quebec, total hours worked increased by 0.4%. Wage inflation for permanent employees accelerated to 5.7% year-over-year, from 5.0% previously, although that was broadly expected by the consensus due to base effects from a year ago. Overall, this is a classic mixed bag report with some stronger than expected news (hours worked, wages) and some weaker (employment, participation), and because of that we continue to forecast a first interest rate cut from the Bank of Canada in June this year,” he said.
James Orlando, CFA | Director & Senior Economist, TD Economics, said the Canadian jobs market ended 2023 with a shrug.
“The flat headline print occurred alongside diverging underlying details. Negative one month, positive the next was a theme of this report. Hours worked jumped higher after falling significantly last month, while job losses in manufacturing and construction occurred after big gains last month. Same goes for hiring of full-time and part-time workers. While this gives us little direction, some trends remained, with Canada’s working-age population having increased by 74k in December, the number of unemployed workers continued to rise, clocking in at +202k in 2023,” he said.”All told, today’s report does little to change the BoC’s thinking. The overall trend in the Canadian economy has been that of gradual weakness. The Canadian consumer has pulled back in the face of high interest rates and businesses have slowed the pace of hiring. With underlying inflation moving towards the BoC’s target, an April policy rate cut remains in view.”
Doug Porter, Chief Economist with BMO Economics, said roday’s sluggish results suggest that the softening seen in the broader economy is finally catching up with the job market.
“Prior to December, employment gains had remained amazing sturdy in the face of paltry GDP growth (at the expense of sickly productivity). That may now be shifting. If so, this would suggest that the jobless rate is almost certain to head higher, pushing above 6% in coming months. In turn, that should eventually take some steam out of wage gains, which at above 5% are now running well north of 3% inflation,” he said.”For the Bank of Canada, the sticky wage strength, combined with the solid U.S. payroll results today, will more than offset the sluggish domestic job tally. We continue to expect the Bank to be very patient on the rate cutting front.”

Mario Toneguzzi

Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list

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